Adani Cement Strategic Refinancing After Ambuja and ACC Cements
Another indication of the growing backing that financial institutions and investors are giving the conglomerate is the fact that Adani Cement has refinanced a $3.5 billion loan that was taken out for the acquisition of ACC and Ambuja Cements.
Gautam Adani successfully acquired the arms of Holcim India in September 2022 through Endeavour Trade and Investment Ltd, a special purpose company. The acquired companies were Ambuja Cements Ltd and ACC Ltd.
In addition to an open offer to the shareholders of both companies, Holcim’s investment in Ambuja and ACC was acquired as part of the transaction.
At $6.50 billion, the Holcim stake plus the open offer consideration for Ambuja Cements and ACC made it the largest acquisition by Adani to date and the largest M&A deal in India’s materials and infrastructure sector.
The deal included Holcim’s 4.48 percent direct holding in ACC as well as its 63.11 percent stake in Ambuja Cements, which had a 50.05 percent interest in ACC.
In a proclamation delivered on Friday, Adani Concrete declared that it had completed the most common way of renegotiating the obligation that the two firms had taken on through a supporting bundle from various unfamiliar banks.
There will be a $300 million expense reserve funds from the renegotiate. Ten unfamiliar banks altogether participated in the plan.
Adani Concrete expressed, “The $3.5 billion re-funding program, which was finished with various global banks and had obligation developments of as long as three years, authenticates areas of strength for the and admittance to capital, enhancing the strong capital prudency embraced at all portfolio organizations.”
This shows Adani’s strong liquidity position and wide admittance to the worldwide monetary area. It expressed, “This achievement exhibits our commitment to development and monetary steadiness.”
Adani Cement’s Capital Management Success and Growth Prospects
The company states that the $3.5 billion refinance represents the ongoing implementation of the capital management plan that was first presented in September 2022 and calls for Adani Cement to gradually reduce its leverage, with cement vertical net debt to EBITDA (earnings before interest, tax, depreciation, and amortization) now being less than twice as high.
The EBITDA per tonne increased from Rs 340 in the quarter ending September 2022 (immediately after the acquisition) to Rs 1,253 in the quarter ending June 23, which represents embedded deleveraging through elevated coverage positioning, according to the statement. These factors, along with the advantages of synergies with the integrated Adani infrastructure platform, particularly in the areas of raw materials, renewable power, and logistics, where Adani portfolio companies have vast experience and deep expertise, also contributed to the improvement.
With the purchase of Sanghi Cement by ACC in 2025, the combined installed production capacity of ACC and Ambuja Cement would increase to 100 million tonnes (mt) annually. After UltraTech Cement, which is led by Kumar Manglam Birla, the firm is the second-largest cement manufacturer.
According to Adani Cement, ten foreign banks provided facilities totaling $3.5 billion to finance the deal.
Mizuho Bank, First Abu Dhabi Bank, DBS Bank, and MUFG Bank served as the transaction’s required lead arrangers, bookrunners, and underwriters.
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Furthermore serving as the transaction’s mandated lead arrangers and bookrunners were Barclays Bank plc, BNP Paribas, Deutsche Bank AG, ING Bank, Sumitomo Mitsui Banking Corporation, and Standard Chartered Bank.
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